Value Chain Report on the Payment Industry in Chile

Abstract

The Chilean payments ecosystem has undergone a profound transformation over the past decade, evolving from a highly concentrated, card-centric landscape into a dynamic, digitally driven marketplace served by banks, global card schemes, domestic networks, fintech start-ups, Big-Tech wallets, alternative payment method (APM) providers, and a modern regulatory framework led by the Central Bank of Chile (Banco Central de Chile) and the Comisión para el Mercado Financiero (CMF). This report maps the entire value chain—from payment initiation through final settlement—identifies the principal actors, quantifies market volumes where data are available, and analyses the commercial relationships, bottlenecks, and prevailing business models that shape value creation and capture. It concludes that Chile is on the cusp of a new payment paradigm powered by open finance, real-time transfers, and intensified competition in merchant acquiring, yet it still faces challenges around interoperability, fraud, interchange-fee regulation, and full implementation of the 2023 Fintech Law.

Introduction

Overview of the Payment Industry in Chile

Chile boasts one of Latin America’s most mature payment markets, with retail transactions per capita rising from 117 in 2018 to 279 in 2022 and card payments representing 47 % of total transaction volume in 2024. The annual value of card transactions is estimated at USD 132.56 billion in 2024, and e-commerce reached USD 34 billion in 2023. A traditionally card-dominated model, long centred on Transbank as the sole acquirer, is being reshaped by regulatory liberalisation, fintech innovation, and consumer appetite for digital wallets, instant bank transfers, and Buy-Now-Pay-Later (BNPL) offerings.

Purpose and Scope of the Report

This study aims to:
• Define every step of Chile’s payment value chain and the activities embedded in each segment.
• Profile the leading players—incumbent and emergent—quantifying volumes and market shares where possible.
• Examine the commercial ties, products, and services exchanged along the chain.
• Identify bottlenecks and structural challenges hampering optimal market performance.
• Detail the business models and revenue mechanics governing relationships between stakeholders.
The analysis synthesises secondary data from regulatory, academic, and industry sources up to Q1 2025.

Value Chain Definition

Comprehensive Steps and Segments

Step	Core Activities	Representative Segments	Typical Players
Payment Initiation	Capturing the payer’s intent to pay	• POS (card, NFC) • E-commerce checkout • Mobile P2P • Bill-pay portals • Account-to-Account (A2A)	Consumers, merchants, e-commerce platforms, POS vendors, payment gateways
Authentication & Authorization	Verifying identity and funds	• Card authentication (PIN, 3-DS) • Account authentication • Fraud analytics	Issuing banks, networks (Visa, Mastercard, Redcompra), fraud-prevention firms
Processing	Routing and formatting transaction data	• Transaction switching • Data translation • Network interconnection	Payment processors (Transbank, Worldline), gateways (Webpay Plus, Khipu)
Clearing & Settlement	Reconciling positions and transferring funds	• Net clearing (ComBanc) • RTGS settlement (LBTR) • Dispute management	Central Bank of Chile, commercial banks, card networks
Acceptance & Wallets	Enabling merchants to receive—and payers to store—value	• Merchant acquiring • Payment gateways • Digital wallets • APM acceptance	Acquirers (Transbank, Getnet, EVO/Bci), wallets (Mercado Pago, MACH, Tenpo), Servipag
Infrastructure & Networks	Foundational rails and connectivity	• Card schemes • Interbank networks • ACH • RTGS • Mobile network operators	Visa, Mastercard, Redcompra, ComBanc, Banco Central, Entel, Movistar
Regulation & Oversight	Rule-setting and supervision	• Central Bank policy • CMF licensing • Consumer protection • AML/CFT compliance	Banco Central de Chile, CMF, SERNAC, UAF

A more granular description of each step—including sub-segments, activities, and illustrative players—appears in the Appendix-style narrative below.

Key Quantitative Indicators

• Retail payments per capita: 279 (2022).
• Card transaction value: USD 132.56 bn (2024), CAGR > 7 % (2024-28).
• E-commerce GMV: USD 34 bn (2023) → USD 42.7 bn (2026e).
• BNPL market: USD 651 m (2024) → USD 2.52 bn (2030e).
• Cash share of transactions: 3 % (lowest in top-6 LatAm markets).
• Fintech start-ups: 348 active (2024), 43 % of payments/remittance fintechs exceed USD 100 m in annual volume.

Players Analysis

Methodology

Players are grouped by the value-chain step where they exert greatest influence, though many operate across multiple layers (e.g., banks issue cards, own wallets, and participate in settlement systems).

1. Payment Initiation

Segment	Leading Players	Scale Indicators
POS Card Initiation	Transbank (Webpay), Getnet (Santander), EVO Payments/Bci	>400k active POS terminals; debit cards = 37 % POS value
E-commerce Initiation	Webpay Plus, Flow.cl, Payku, Mercado Pago, Stripe	60 % of e-commerce spend via credit cards
Mobile P2P	MACH (BCI), Fpay (Falabella), Tenpo, Banco de Chile FAN	Mercado Pago: ≈5 m wallet users
Bill Payment	Servipag, Unired, banks’ online banking	Servipag: ~9 m transactions/month
A2A Initiation	Khipu, banks’ own online/mobile apps	Webpay bank transfer share: 74 %

2. Authentication & Authorization

Function	Key Actors	Notes
Card auth.	Issuer banks (BancoEstado, Santander, Bci, Banco de Chile), Visa, Mastercard	3-D Secure 2.0 roll-out completed 2024
Fraud prevention	Feedzai, FICO, Mastercard Cyber & Intel, local reg-techs	Rapid ML adoption among issuers and gateways

3. Processing

Transbank remains the dominant domestic switch, but cross-border PSPs (Worldline, EBANX, APEXX Global) run proprietary routing engines to optimise costs for international merchants.

4. Clearing & Settlement

Banco Central’s LBTR processes high-value payments in real time; ComBanc nets low-value interbank obligations. Average daily LBTR value exceeds USD 9 bn.

5. Acceptance & Wallets

Category	Principal Operators	Market Metrics
Acquirers	Transbank, Getnet, EVO/Bci, Kushki (non-bank)	Transbank MDR ≈ 2.35 % avg.; new entrants pricing < 2 %
Wallets	Mercado Pago, MACH, Tenpo, Fpay, OnePay, Apple Pay, Google Pay	Wallet share < 10 % retail volume but fastest-growing
APMs	Servipag (cash), Wibond (BNPL), Transfi (crypto)	BNPL CAGR 23.7 % (2025-30)

6. Infrastructure & Networks

Visa, Mastercard, American Express, Diners, and local debit scheme Redcompra collectively settle >1.2 bn card transactions annually. Mobile connectivity is provided chiefly by Entel (35.1 % share), WOM, Movistar, and Claro; ~22.8 m mobile internet users (2024).

Commercial Relationships

Commercial interactions govern data, fund flows, and risk allocation:

1. Consumer → Merchant
   • Exchange of goods/services for payment instructions and credentials.
   • Pricing: product price; no direct payment fee for card users.

2. Merchant → Acquirer/PSP
   • Contracts define MDR, settlement cycles (T+1 for debit, T+2-3 for credit typical), chargeback liability.
   • POS rental and gateway set-up fees common.

3. Acquirer/PSP → Network → Issuer
   • Card authorisation passes through scheme; interchange and scheme fees deducted from settlement.
   • For A2A, gateway (e.g., Khipu) connects directly to banks via APIs; fees negotiated bilaterally.

4. Issuer ↔ Clearing House / Central Bank
   • Net obligations settled daily in LBTR; ComBanc charges blended fixed and variable fees.

5. Wallet Provider → Merchant
   • Wallets negotiate discounted MDR (often 1.5-2.0 %) for proprietary rails; settlement can be intra-wallet same day.
   • Additional value-added modules (loyalty, analytics) upsell.

6. Regulators → All Players
   • CMF licensing fees, compliance costs, AML reporting.
   • Central Bank sets interchange caps, publishes standards (e.g., QR interoperability).

Bottlenecks and Challenges

• Regulatory Overload: Fintech-Law secondary regulation (>70 rules) strains compliance budgets; open-finance APIs fully mandatory only by 2027.
• Interchange-Fee Caps: October 2024 reductions compress issuer economics, may curb card-portfolio investment.
• Interoperability Gaps: QR code schemes remain fragmented; limited standardisation delays universal acceptance.
• Fraud & Cyber-Risk: As digital share grows, so do phishing and account-takeover attacks; continuous investment in AI-driven monitoring needed.
• Financial Inclusion: 3 % cash share masks rural and elder segments still dependent on cash; digital literacy programs lag.
• Cross-Border Complexity: FX spreads, dual-pricing regulation, and nascent cross-border acquiring frameworks challenge SMEs seeking export e-commerce revenues.
• Cost-to-Serve: Smaller PSPs and fintechs face escalating cloud, security, and compliance costs, pressuring margins.

Value Chain Relationships and Business Models

Products & Services Exchanged

• Data: authorisation messages (ISO 8583), tokenised credentials, fraud-score metadata.
• Funds: interchange flows, net settlement balances, BNPL receivables sold to funding partners.
• Technology: APIs, SDKs, cloud platforms, EMV kernel updates, QR code specs.
• Ancillary Services: dispute management, working-capital finance, loyalty engines, compliance reporting.

Dominant Business Models

1. Transaction-Based
   – Interchange fee (issuer revenue)
   – MDR split (acquirer margin)
   – PSP per-transaction fee (gateway)

2. Subscription / SaaS
   – Fixed monthly platform or POS rental, often tiered by volume.

3. Value-Added Upsell
   – Fraud-screening, data analytics, marketing services charged à-la-carte.

4. Interchange++ Transparent Pricing
   – Acquirers itemise interchange, scheme, and margin; prevalent among new entrants targeting mid-market e-commerce.

5. Cross-Border Local-Acquiring
   – PSP acts as local agent, prices domestic MDR to offshore merchant, arbitraging FX and scheme fees.

6. Open-Finance Payment Initiation (emerging)
   – PISP charges merchant 30-50 bps per A2A payment, bypassing card rails; consumer charged zero.

Bottlenecks Within Transactions

• Delayed settlements for small merchants (cash-flow pain point).
• Chargeback arbitration backlog at issuers due to rising e-commerce disputes.
• Limited API readiness at smaller banks, slowing PISP roll-outs.

Conclusion

Chile’s payment industry combines high digital penetration with a progressive regulatory stance, positioning it as a Latin American front-runner. The dismantling of Transbank’s monopoly, institution of interchange caps, and the arrival of the Fintech Law have triggered intense competition and innovation across the value chain. Card payments remain dominant, but A2A transfers, BNPL, and wallets are rapidly gaining share as consumers seek convenience and as merchants chase lower acceptance costs. The next inflection point will be the full deployment of open-finance APIs, enabling real-time, low-cost payment initiation and data-driven financial products. Addressing interoperability standards, fraud resilience, and inclusion gaps will be critical to sustaining growth.

Future research should monitor: (1) the economic impact of reduced interchange on card issuance; (2) adoption curves of open-finance-enabled payments; and (3) the effectiveness of regulatory sandboxes in fostering safe innovation.

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